Crypto Theft Has Risen From $3 Million to $500 Million
As cryptocurrencies have risen in prominence, so have crypto thefts and hacking instances. The cryptocurrency space has seen heists rising from $3 million back in 2013 to over $500 million in the present year; the biggest of them being the recent $500 million Coincheck exchange hack.
Strategies That Crypto Thieves Use
While there are many ways in which crypto thieves get in possession of your cryptocurrency, five prominent strategies have emerged from experience over these years. These are brute forcing, phone-porting, phishing, ponzi schemes and mining malware & crypto jacking.
- Brute Forcing
Brute forcing (aka brute force cracking) is a trial and error method used by application programs to decode encrypted data such as passwords or Data Encryption Standard (DES) keys, through exhaustive effort rather than employing intellectual strategies. The automated software guesses every possible password until solved. Hackers use this technique to access the backend and get full access to funds.
Phone porting or service provider portability is the ability of the end user of an existing fixed-line or mobile telephone number to reassign the number to another provider. Hackers use this technique to gain access to a phone number by getting the number ported to their mobile device. The thief then resets crypto account passwords and gains access to funds.
This is the fraudulent practice of sending emails claiming to be from reputable companies in order to induce individuals to reveal personal information, such as passwords and credit card numbers. Hackers use this technique to send suspicious emails and social media messages, also dispensing malware in some cases. The North Korean malware attack resulted in theft amounting to $7 million.
4. Ponzi Schemes
A form of multi-level marketing strategy applied to cultivate a belief in the success of a non-existent enterprise by the payment of quick returns to the first investors from money invested by later investors. Investors get bonuses for getting others to sign up. The 2018 BitConnect collapse is an example here.
5. Mining Malware & Cryptojacking
Cryptojacking is a form of cyber attack in which a hacker hijacks a target’s processing power or a user’s mining software in order to mine cryptocurrency on the hacker’s behalf. In this technique, the hacker embeds power jacking miners in ads and extensions from sites like Coinhive that mine using visitor CPUs.
While it’s difficult to guarantee 100% safety with crypto transactions online, techniques such as creating backups, using anti-virus software and multi-factor authentication systems can help reduce the amount of crypto theft.
Image Credit: Deposit Photos